• October 24, 2014

Education Dept. Gets Record Number of Comments on 'Gainful Employment' Rule

With millions of dollars in revenue at stake, for-profit colleges and their supporters have flooded the Education Department with tens of thousands of comments opposing its proposed "gainful employment" rule.

During a 60-day public-comment period that ended last week, the department received more than 83,000 comments from opponents and supporters of the proposed rule, which would cut off federal student aid to programs whose students have high debt-to-income ratios and low loan-repayment rates. Many came from students and faculty members of for-profit colleges, and many were submitted through Web sites offering pre-crafted letters.

An Education Department spokesman said the influx of comments represents a record for higher-education rule making.

In contrast, in 2007, during a controversial rule making on student-loan issues, the department received only 323 comments. A 2008 rule making that created an income-based repayment plan for student loans and expanded student-loan forgiveness generated 1,832 comments. And last year's rule making on a hodgepodge of topics stemming from the renewal of the Higher Education Act yielded only 358 comments.

Comments

1. westlaguy - September 14, 2010 at 08:37 am

Just exactly how does the writer know where the comments have come from and the positions taken ? The Education Dept. obviously is in favor of the rule it has created and therefore it cannot be assumed to be impartial in describing the comments as being for or against the proposed rule. Reporting PR handouts as news does not contribute much to the debate.

2. esselan - September 14, 2010 at 09:48 am

The comments are public record, westlaguy. Anyone can read them.

3. softshellcrab - September 14, 2010 at 10:02 am

I am no fan of for-profits due to my own experience with teaching for several which did not seem to have any academic standardsd whatsoever and were all about simply retaining students and their tuition dollars. Others have criticized me for this, and said that they had experience with for-profits which in fact had academic standards.

But as I read this, the other Chronicle headline on the right side of my screen, for another article, reads: "In Rising Student-Loan Defaults, More Fodder for Fight Over 'Gainful Employment' Rule ". There is a lot of evidence that for-profits particularly are encouraging anyone to enroll and get federal loans which they will later default on. I posted a reference to a Business Week article about U. of Phoenix recruiting homeless people to get loans and attend their school. This has got to be stopped dead in its tracks.

4. prof_truthteller - September 14, 2010 at 10:09 am

I wonder how many students at for profit colleges were given an 'assignment' to write a letter on this issue. I'm only half joking- It's so easy to insert a link into the online course page. CLICK HERE to help us!

Of course, only a for (huge) profit company can marshall the funds to mount the kind of media campaign that can generate this number of responses. The money, and the chutzpah. Brazen, unabashed, flat out defense of the whopping profits this industry has been showing. For stock holders, it's almost the only game in town. Non profit and public colleges really don't stand a chance. Who pays for their media blitz? Taxpayers? Some wealthy supporter, like how the Koch brothers support the TEA party?

I don't agree that this rule is the best way to regulate the abuses rampant in the for profit education industry. But serious reform is necessary. And, if money is all they understand, changing how the money flows is the only way to do it.

5. prof_truthteller - September 14, 2010 at 10:16 am

essalen, could you post the link to the comments? With 83,000 of them, and estimating 3 minutes per, I should be able to read them all in 4,150 hours. I'd like to get started asap. thanks.

westlaguy, not being impartial is not the same as being wrong.

6. 22063319 - September 14, 2010 at 10:27 am

Profits are not evil (are they?). They are essential to fuel our capitalist economy (we still have something akin to a capitalist economoy, don't we?). However, it's buyer beware, and in the case of federal aid for higher education, the buyers are not just the student consumers but all of us tax payers. It's not just defaults; student loans are subsidized by our tax dollars, and students at for-profits also receive a disproportionate share of Federal Pell Grant funding.

I don't want to buy a defective product. We civic minded tax payers and our representative federal government have a responsibility to hold for-profits to account and ensure we get good value for our money.

7. 11209892 - September 14, 2010 at 10:56 am

I have been very pleased with my experience as an instructor at a for profit college in the Chicago area. I work here because I feel that I am contributing to the improvement of our student's lives. Keep in mind that the bad behavior of a few should not tarnish the good that "the many" are trying to do.

cju

8. director19 - September 14, 2010 at 11:13 am



There are many reasons why students at for profit colleges have higher debt at graduation than non profits and not for profits--all those fine universities and colleges. Where do they get their funding? Donors, the public coffers, from you and me. It gets funneled through the feds and the states but it's really the same type of subsidy.

For profits have to continually raise tuition in order to stay in compliance with the absurd 90/10 requirements. So, if you raise the amount a student can borrow, tuition must go up accordingly. So who is the "evil" doer? The feds themselves.

Many of the leaders in for profit have testified before congress and told them that tuition could be lowered dramatically if they would provide 90/10 relief. Not a chance!

9. pittsburghtec - September 14, 2010 at 11:30 am

I have worked in the career college industry for over 20 years. Yes there are some "bad apples" in the industry but "the entire orchard", to use Senator Harkin's analogy is far from rotten. At our institution the Golden Rule is "Take care of the student and the bottom line will take care of itself". This does not mean playing God on the front end by saying who should and should not be admitted. It does not mean giving students grades in order to keep them in school. It does mean providing students a student centered learning environment that gives them their best shot at becoming a productive member of society. It means developing career centric curriculum that provides the motivated student with the skill set necessary to secure an entry level position in their discipline.

Are we more expensive? I would argue we are not, if you consider all the taxpayer subsidies provided to community colleges and public 4 year institutions.

There are already enough regulations on our sector, many more than our non profit brethren. The Department just needs to enforce the regulations already in existence.

10. betterschools - September 14, 2010 at 11:37 am

On the factual side of this issue, this new report is worthwhile in that it focuses on taxpayer costs per output (graduation). As far as I can see, its only cost-relevant omissions pertain to forgone and paid taxes, so it is a bit conservative in its calculations.

http://www.intered.com/storage/deptofed/TotalTaxpayerCost_Sept09.pdf

I don't honestly know what ED is thinking at this moment. Student and professor letters aside, on both sides, there are compelling and irrefutable facts that they failed to take account of. As these facts begin to trickle out, ED is looking too clever by half.

Additionally, whatever your ideological stance, the proposed rules contain inequities which, when seen, will trouble any person who places fairness above politics.

One example of this is the student loan default issue. Solid empirical data tell us that the largest factor in defaults is high debt/income ratios caused by over-borrowing (i.e., far in excess of tuition) as a substitute for saving, working, and deferring the expenditure. Students are borrowing in excess of their ability to pay back the loan in order to make car and house purchases, etc.. Knowing this, ED proposes to hold the for-profits (and only them) accountable for this payback at a 45% rate (I'm omitting details for clarity but not distorting the point). Here comes the second unfair part. The schools have asked for visibility and counseling rights into the borrowing process so that they can help students set realistic borrowing targets and discourage students from borrowing more than they can project being able to pay back. It is a win/win/win for the student/school/taxpayer when a student borrows intelligently. ED refuses! I participated in a teleconference where they clearly stated that students can borrow as much as they please (ED actually encourages borrowing and consolidation) while: (a) the school will be held accountable for the payback, (b) the school will be denied any role or even any visibility into the loan process or amount, and (c) the first the school will know of a problem is when they receive a (typically late and error-ridden) default report, long after the fact.

Despite my obvious discontent with these proposed rules, our clients represent all three types of colleges and universities and we will be unaffected by any particular outcome with respect to Gainful Employment. I object to the growing federal control, wherever it may be directed -- public or private. Listen: the feds commandeered control over ALL of higher education when they took student loans away from the private sector last year. They have been trying to do that for 20 years. Now, the for-profits are the first control target of the Beltway folks who believe they can make better decisions than you. I don't see much evidence that they can make better decisions. Do you? If I were in public higher education today (I spent years there) I would become fully informed on this issue (cf. the widespread ignorance that get posted throughout CHE on this topic) and join the for-profits in rejecting more federal control. If you don't, I fear we will be having an "I wish I'd done something" conversation two years from now.

This link . . . http://www.intered.com/storage/deptofed/ParthenonPublicComment090910.pdf retrieves a research paper that shows how the feds cooked the books by scouring the state databases until they found a state (Missouri) that would make their goals seem reasonable then used that state as "representative" of the nation. The research will be more informative to those familiar with the proposed Gainful Employment rules.


Robert W Tucker

11. laurin - September 14, 2010 at 11:43 am

A matter that I find confusing is the way the blame is being pointed. No matter what the type of school is receiving the title IV funds the federal government is the one that approves the fact that the school is eligible to receive the funds. They audit the school, they approve the school and they even place the school on a probationary period for the ratio of Federal funds to percentage of annual/quarterly tuition comes into that school. So the Federal Government has approved the loan program and now they are trying to shirk the responsibility for their program. That does not make sense to me. They are acting like any school that wants to receive Title IV Funds can and they cannot. Just wondering about this part of the puzzle...

12. efrish - September 14, 2010 at 12:00 pm

If you go to http://www.regulations.gov/search/Regs/home.html#home and search on Docket ID ED-2010-OPE-0012, you can access the 12013 responses that are posted. They are searchable by key words.

13. educationdoctor - September 14, 2010 at 01:47 pm

@Softshellcrab - I agree with you. Likewise I have taught for and resigned from several for-profits due to their low academic standards. There must be strict regulations which focus on academic standards because the students, many of whom are Black Americans are really receiving sub-standard education at many of the for-profits. The standards must be raised or they should be shut down.

Example: Many of the students at some of the for-profit colleges could not write decent assignments/research papers yet they were given grades of A or B. As a result, students were being passed along and eventually graduate with sub-standard skills.

For those fighting for the for-profits, please understand that there are too many for-profits who are operating schools just for the profit and do not care about the quality of education or low standards under which they operate. This is a serious problem!

14. betterschools - September 14, 2010 at 03:24 pm

@educationdoctor & @softshell,

If you are referring to my post, I urge you to read it. I am not fighting for the for-profits, I am suggesting consideration of principles higher than those which drive the dissatisfying experiences the two of you had in FPHE.

There is vastly more to this issue than your personal agenda, informed by your personal experiences. Some of us, myself included by dint of my work, are in a position to simultaneously observe the functioning of hundreds of institutions, public and private. I can tell you that a good deal of what you hold dear is at risk down this line. Not this time but surely soon.

If you truly believe the feds can make better decisions about your industry (let's assume it public higher education), then you and I are on the opposite sides of this issue.

If, on the other hand, you think the feds don't make very good decisions and that your institution, not the feds, should exercise control over how and how much you loan, and what you should teach to quality for loans, and what employment requirements should be placed on your school, you might want to set aside your dislike for your for-profit experience(s). I am suggesting a larger, more national, less personal, look at these issues.


15. docfox - September 15, 2010 at 12:28 am

@betterschools

16. docfox - September 15, 2010 at 12:33 am

Speaking of personal agendas, when considering the views of Robert W. Tucker (who frequently posts as "betterschools" and "intered"), one should be aware of his history and some of the context in which he operates:

17. docfox - September 15, 2010 at 12:34 am

Tucker is a former Senior VP for Research and Information Services for the University of Phoenix. It is likely that he maintains a significant financial interest in the Apollo Group (UOP's parent company) as a result of executive stock options.

18. docfox - September 15, 2010 at 12:39 am

Tucker's current company, InterEd, appears to be either a subsidiary of the Apollo Group (the parent company of the University of Phoenix) or at least closely connected to them: http://starpas.azcc.gov/scripts/cgiip.exe/WService=wsbroker1/history-detail.p?corp-id=01434491 (scroll down to the name changes/mergers section). I would love to hear Tucker clarify the exact relationship between InterEd and Apollo.

19. docfox - September 15, 2010 at 12:41 am

Tucker's current company, InterEd, focuses on helping "grow, refine, or re-direct adult-centered or professional programs." It is likely that a very significant proportion, if not the majority, of InterEd's clients are for-profit institutions.

20. docfox - September 15, 2010 at 12:42 am

Tucker frequently cites studies and reports by InterEd that are sometimes published on the InterEd website. Few of these studies, if any, appear to be published in independent, peer-reviewed, academic journals and I suspect many (if not most) are funded by his for-profit clients. Others are comments by business consulting firms like The Parthenon Group, which also likely has a vested interest in FPHE.

21. betterschools - September 15, 2010 at 12:27 pm

@docfox,

At the risk of triggering another obsessive string of posts, I have to ask if you are really a reasonably well educated faculty member? If so, where and what do you teach? Being able to hide behind the apron strings of anonymity allows quite a few crazies to post here using university accounts.

Looking back over my invitations for you to say something substantive, you seem only capable of mindless erroneous posts about who I am. Most senior leaders in higher education know me and my background, as I know theirs. It is a small community . . . and we all get along, even if we disagree on specific issues.

If you do have any interest in and concrete knowledge of this topic, may I invite you to: (a) let us know who you are (so we can evaluate your potential biases as you seem obsessed with evaluating mine) and (b) ring in with some informed perspectives, whatever they may be.

Do you, for example, have a concrete suggestion in relation to any particular facet of the growing student loan default problem and how it relates to the proposed rules on gainful employment?

I, for example, believe that schools should be involved in the process of setting realistic loan amounts. Currently, they are prohibited from doing this. I see many ways this participation might take place and would invite suggestions from you and others as to the best way or arguments as to why this might not be the good idea I think it is.

I also suggested that we need to recognize the true causal forces in defaults and not blame them on a particular institutional type, especially the wrong one (Historically Black Colleges and Universities have the highest loan values and defaults, far higher than the for-profits). Do you have a concrete suggestion as to how we can address default causes and ameliorate the situation?

Any grounded advice that is based on an understanding of the empirical realities and the proposed regulatory changes would be welcomed. Are you capable of that?

Robert W Tucker

22. belaglik - September 15, 2010 at 08:08 pm

@softshellcrab
What's wrong with getting homeless people to continue their education? Not every homeless person is in that situation because he or she is stupid or uneducated.
It's too bad public colleges and universities have not done a better job of reaching out to all underserved groups.

23. docfox - September 15, 2010 at 11:07 pm

@betterschools,

My background is actually irrelevant to the issue at hand, because I am not trying to present myself or my company as some sort of impartial arbiter of higher education facts and knowledge. You chastise other commenters for pursuing their "personal agendas," yet you (and InterEd, Inc.) seem to be little more than a shill for the for-profit education industry in general and probably the Apollo Group in particular.

24. mamakatephd - September 27, 2010 at 08:38 am

I work for U of Phoenix, strictly for the money, and was forced to submit a canned comment in favor of the college. I was given no opportunity to add my own comments. I hope the DOE will be highly suspicious of all the responses pleading for leniency on the new rules. These colleges do need to be under stricter regulation than traditional schools.

25. diabolical_machine - September 29, 2010 at 07:22 pm

@mamakatephd, Really? You were "forced" to submit a canned comment? I somehow doubt that. Somehow I doubt there were threats made regarding your employment and that someone was making a record of who was for or against.

If it were true, you had plenty of opportunity to provide multiple comments outside of work voicing your opinion against it. You could have contacted the DoE, your Senator and Representative and voiced your concern.

Instead I think what this really is, is a case of people who are angry that people took the time to voice their support and now want to do or say anything they can to invalidate those responses.

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